Can the Registrar record a member your society refuses to enrol? Bombay High Court in New India CHS, decoded

A final order says a person is a member of your society. The committee has not entered the name in the register, and the person has gone to the Deputy Registrar. The committee is now asking what the Registrar can actually do. On 26 April 2019 a single judge of the Bombay High Court answered that in New India Co-Operative Housing Society vs The Deputy Registrar.

The case in brief

Respondent No. 3, not named in the judgment, applied for deemed membership of the petitioner society. The Deputy Registrar allowed it on 7 August 2006. The challenge failed before the Divisional Joint Registrar and a Single Judge, and the Supreme Court dismissed the society's special leave petition on 23 April 2019. There was no stay while that petition was pending.

The society still did not record the membership. The Deputy Registrar issued directions under Section 79. The society resisted, saying the petition was pending and Section 79 gave no power to enrol. By order dated 29 June 2015 the Sub-Registrar directed the authorised officer to record the membership, with police assistance. The society challenged that order in Writ Petition No. 2022 of 2015 before S.C. Gupte, J. The question was whether Section 79(2) of the Maharashtra Co-operative Societies Act 1960 empowers the Registrar or his nominee to enforce a deemed-membership order made under Section 23. The society said Section 79(2) covers only the returns and statements in Section 79(1).

What the court decided

The Sub-Registrar's order was correct, though he cited the wrong provision: Section 80(2) was not the source of the power; Section 79(2) is.

The court read Section 79(2) as applying wherever a society is required to take any action under the Act, rules or bye-laws. Filing returns is one example of such action, not the limit of the sub-section.

The holding is framed narrowly. On these facts, where an appeal order under Section 23 in the applicant's favour had become final, the society was duty bound to enter the name in the register of members and to issue a share certificate. The Registrar had required it, after the appeal was disposed of, to enter the name within fifteen days. The court said:

> "This being so and such action being required to be taken under the Act, rules and the bye-laws, any non-compliance thereof is actionable under Sub-section (2) of Section 79."

Failure is therefore actionable under Section 79(2), and the Registrar or his nominee may act at the society's expense. The petition was dismissed with costs of Rs. 25,000 payable to Respondent No. 3, and the order of 29 June 2015 stands.

Why it matters for your society

Here the society lost at every stage from 2006 to 2019, with no stay in force, and still faced a police-assisted officer at its records, plus costs.

Under Section 23(1A) a person is a deemed member where the society refuses the application or does not communicate its decision within 60 days of receipt with the prescribed fee. Section 23(2) gives an appeal to the Registrar and Section 23(3) makes his decision final.

What your committee should do

1. 1Confirm the order is final under the Section 23 route taken (23(2) appeal, 23(3) decision or 23(1A)), and check whether any court has actually stayed it. (the court noted only that there was no stay)
2. 2Put the order before the committee and minute the decision to comply.
3. 3Enter the name in the Register of Members, which bye-law 141(1) of the 2014 Model Bye-laws requires in 'I' form prescribed under Rule 32 of the MCS Rules 1961.
4. 4Issue the share certificate. Under bye-law 9(a) it bears a distinctive number with the member's name, shares issued and value paid, and is issued within six months of allotment. Under bye-law 10 it bears the society's seal, is signed by the Chairman, the Secretary and one authorised Committee member, and is issued by the Secretary.
5. 5Comply with any Section 79 direction within the time given; the Registrar's officer may act at the society's expense.
6. 6For pending applications follow bye-law 63: acknowledge each (63(a)), flag short-comings within 15 days (63(b)), dispose within 3 months (63(e)), communicate the decision within 15 days, with reasons where rejected (63(g)).

Limits of this ruling

The court did not reopen the merits of the original order. It did not decide whether Section 79(2) can adjudicate a dispute between parties, saying only that the Indrasen ratio concerns that point. It did not expressly rule on whether the pending petition barred implementation, noting only that there was no stay. It said nothing about expenses or penalty under Section 79(3).

Earlier cases: Mohanlal Bhagwan Pandey v. Apurva Co-op. Hsg. Soc. Ltd was held per incuriam, having read only Section 79(1). Sudhir Co-operative Housing Society Ltd v. State of Maharashtra was distinguished; it concerned a land-transfer direction under Section 79(1), a matter for the Co-operative Court. Indrasen Co-operative Housing Society v. State of Maharashtra was restricted to its facts; its ratio is that Section 79(2) cannot adjudicate a dispute between parties. A Division Bench decision of 7 November 2014 in Bhandara Zilla Parishad Wa Panchayat Samiti Karamachari Sahakari Sanstha Ltd, holding Section 79(2) wider than Section 79(1), was said to be treatable as having impliedly overruled Indrasen.

Paragraph 12 adds an alternative discretionary ground: even if the society were right in law, the court would not exercise writ jurisdiction in favour of a society that refuses to implement final orders.

One caution. This judgment applied Section 23(1A) with a 60-day period. Bye-law 63(g) of the 2014 Model Bye-laws says that if the decision is not communicated within three months of receipt, the applicant is deemed admitted as provided under Section 22(2). Each is stated as it stands in its own source; we do not say either prevails. Check which route your own application falls under before relying on either period.